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Labour’s “mansion tax” only raised €2.5m - Pearse Doherty T.D.

Sinn Féin Finance Spokesperson Pearse Doherty TD has said figures showing that last year only €2.5m was raised by the so-called mansion tax on houses over €1m and that only 1.8% of homes received an exemption have shown the Property Tax up for the unfair tax it is.

Deputy Doherty said:

“These figures are unambiguous- they show that the property tax is an unfair tax with barely any deferrals or exemptions being applied. The Labour Party’s claims about the so-called mansion tax have also been shown to be totally exaggerated. The extra 0.25% tax on properties over €1m raised only €2.5m last year. The so-called mansion tax accounts for less than 1% of the property tax collected.

"The government’s initial projections were that 15% of homes would be entitled to a deferral from the property tax. It seems now that as little as 1.2%- only 18,700 homes out of 1.6 million homes across the whole state will be entitled to a deferral. For a government that has cut billions over its short life span that is miniscule. The higher rate for houses over €1miilion euro and the exemptions were meant to provide cover for Labour’s support on the property tax. That cover is now well and truly exposed as pure spin.

"Sinn Féin remains firmly opposed to this unfair tax and will scrap it in government. It is dampening domestic demand and is an unbearable burden on families across the State. As of yet no local government service has received a cent from the tax.

"The Labour Party can no longer claims that this tax is a fair tax. These figures justify Sinn Féin’s position that this tax should be scrapped.”

* To ask the Minister for Finance the revenue raised by the additional element of the local property tax on houses valued at above €1m in 2013 and to date in 2014.

- Pearse Doherty T.D.

For WRITTEN answer on Wednesday, 2 April, 2014.

* To ask the Minister for Finance the percentage of claims for deferral of the local property tax accepted by the Revenue Commissioners in 2013 and to date in 2014.

- Pearse Doherty T.D.

For WRITTEN answer on Wednesday, 2 April, 2014.

* To ask the Minister for Finance the percentage of claims for exemption from the local property tax accepted by the Revenue Commissioners in 2013 and to date in 2014.

- Pearse Doherty T.D.

For WRITTEN answer on Wednesday, 2 April, 2014.

* To ask the Minister for Finance the way the 3% rate for deferrals and exemptions under the local property tax compares to earlier forecasts from his Department and the Revenue Commissioners; and if he will explain any discrepancies.

- Pearse Doherty T.D.

For WRITTEN answer on Wednesday, 2 April, 2014.

REPLY.

I am advised by the Revenue Commissioners that the most recent Local Property Tax (LPT) data published by them is available on the Commissioners' website at: http://www.revenue.ie/en/tax/lpt/lpt-stats-0214.pdf. This covers statistics for both 2013 and 2014 (to February 2014).

In relation to Question [15462/14], I assume that the Deputy is referring to the provision whereby liability for LPT in respect of residential properties valued at over €1m is established by applying a rate of 0.18%tothe first €1m in value and 0.25% to the portion of the value above €1m.

I am advised by the Revenue Commissioners that the most recent data published by them shows that about 0.2% of properties have been valued for LPT purposes in excess of €1m on a self-assessment basis. On that basis, it is estimated that some €2.5m additional tax was collected for 2013 that is attributable to the 0.25% rate on that part of the property valuations in excess of €1m. It is reasonable to conclude that the final figure for 2014 is likely to be double the 2013 amount, however it is not possible to be definitive at this stage about amounts collected to date for 2014 at the 0.25% rate.

Regarding Questions [15463, 15464 and 15465], as indicated in the Revenue Commissioner's statistics, there are about 18,700 properties where deferrals have been claimed and around 28,300 claims for exemptions among the returns processed to date. These equate to about 1.2% and 1.8% of properties returned respectively. These figures are primarily based on claims submitted by property owners in their LPT returns.

As the Deputy notes, earlier forecasts predicted that the level of deferrals and exemptions could be substantially higher. These figures were estimated prior to the implementation of LPT. While considerable effort may have been put into initial estimates of possible levels of exemption and deferral, the impact of the actual exemption and deferral provisions could not be accurately determined until the returns process has been completed.

It should be noted that deferral is a personal choice issue for property owners and some, although they meet the conditions of deferral, may opt to pay the tax if their means allow it. Consequently, even if the number of potential eligible cases were known in advance with accuracy, it would not have been possible to estimate the number that would actually apply for a deferral.

Revenue estimates that the compliance rate for 2013 is currently at 93%. It may be the case that some property owners have not claimed an exemption or a deferral on the misapprehension that they are automatically entitled to one. It is important for property owners to be aware that they must apply for exemption from LPT or deferral as it will not generally be granted automatically and the Revenue Commissioners advise that this has been a key part of their communications message since the introduction of the tax.

The Deputy will be aware that the deadline for property owners to bring their LPT affairs (including the Household Charge) up to date and avoid interest and penalties was 31 March 2014 and has now been extended to today. I am advised by the Commissioners that their current priority is processing the large volume of Returns and payments received and they expect to publish more detailed data and analysis in due course.